On April 1, 2014, Oregon Governor John Kitzhaber signed HB 4126, which makes changes to Oregon’s renewable portfolio standard. A renewable portfolio standard is a law that requires a utility to purchase a specific amount from renewable resources. HB 4126 is a compromise that will make it easier for electric cooperatives to meet their renewable portfolio standard requirements as they increase their electric load. The law may also allow Oregon utilities to offer separate “green tariffs” to non-residential customers.
Oregon’s renewable portfolio standard imposes different requirements for large and small utilities. For Oregon’s three largest utilities (Portland General Electric Company, PacifiCorp, and Eugene Water and Electric Board), the standard started at 5% in 2011, and it increases to 15% in 2015, 20% in 2020, and 25% in 2025. Smaller electric utilities have standards of 5% or 10% in 2025. Eligible resources include wind, solar, geothermal, certain biomass, and new hydroelectric. Most historic hydroelectric resources do not count toward the standards.
Umatilla Electric Cooperative is experiencing load growth, which would make them a large utility and subject to higher standards. Umatilla Electric Cooperative proposed that the standard could be meet with historic hydroelectric resources, which would allow the cooperative to meet the standard without the acquisition or construction of new renewable resources. The proposal was opposed by environmental and renewable resource advocates.
HB 4126 allows new large consumer owned utilities to meet a bigger share of their renewable portfolio standard requirements with renewable energy certificates rather than building new renewable generation resources. Renewable energy certificates are essentially property rights to the environmental attributes of power, and can be sold separately from the actual electricity associated with the renewable generation. Currently, the prices for renewable energy certificates are low, and it is cheaper to meet a renewable portfolio standard with renewable energy certificates than building new resources.
HB 4126 also includes a provision that allows investor owned utilities to voluntarily offer “green tariffs” to commercial and industrial customers. These would be resources in addition to the requirements of the renewable portfolio standard requirements.
The Oregon Public Utility Commission has initiated an investigation into whether and how to implement green tariffs. The Oregon Commission must consider a number of factors before allowing green tariffs, including whether they further the development of renewable energy, how they affect competitive electric markets, and the impact on other customers.
A copy of an Oregonian News Article is HERE
Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.
